July 21, 2025
Trade War
Uncertainty
Two Weeks After They Were Caught Off Guard By Trump’s Announcement Of The Trade Deal, Vietnam’s Negotiators Were Still Working On The Terms Of Their Trade Deal With The United States. According to Bloomberg, “Vietnam’s negotiators are still working on the terms of the tariff deal with their US counterparts, more than two weeks after it was first announced by US President Donald Trump. The two sides are ‘continuing discussions to clarify and concretize related contents’ following the call between Party chief To Lam and US President Donald Trump, Ministry of Foreign Affairs spokesperson Pham Thu Hang said at a briefing in Hanoi Thursday. Hang refused to be drawn when asked whether Vietnam has accepted the tariff agreement that Trump declared was a done deal on July 2. Since then, neither side has published any kind of detailed outline, providing little clarity on how the 20% rate or the 40% levy on goods deemed to be transshipped through the country will be enacted or enforced. Vietnam’s leaders were caught off guard by Trump’s declaration that they had agreed to a 20% tariff, Bloomberg News reported. Vietnam still seeks to lower the rate, people familiar with the matter said.” [Bloomberg, 2025-07-17]
Higher Prices
WSJ Analysis: Amazon Has Quitely Hiked Prices On Thousands Of Essentials. According to the Wall Street Journal, “In January, this can of Campbell’s New England Clam Chowder cost less than $2 on Amazon. In the five months since President Trump first announced sweeping tariffs, Amazon quietly raised prices on low-cost products such as deodorant, protein shakes and pet care items, a Wall Street Journal analysis of nearly 2,500 items found.” [the Wall Street Journal, 2025-07-20]
- July 2025: On Average, Those Goods Increased In Price By 5 Percent. According to the Wall Street Journal, “On average, prices on inexpensive goods like these increased 5% by July.” [the Wall Street Journal, 2025-07-20]
June 2025: Import Prices Before Tariffs Rose Despite Lower Energy Prices, As Consumer Goods Became More Expensive. According to Reuters, “U.S. import prices rebounded marginally in June amid cheaper energy products, but higher costs for consumer goods were consistent with a tariff-driven increase in inflation.” [Reuters, 2025-07-17]
- As Capital Has Flowed Out Of The Country And The Dollar Has Weakened, The Likelihood Of Tariff Costs Being Passed On To Consumers Increased. According to Reuters, “Though core import prices rose moderately last month, a depreciating dollar poses an upside risk to inflation. The trade-weighted dollar is down about 7.1% this year. ‘Since the Trump administration began imposing tariffs, the dollar has depreciated, which could lead to a larger pass-through from tariffs to consumer prices,’ said Michael Pearce, deputy chief U.S. economist at Oxford Economics. ‘A weaker dollar boosts the likelihood that firms pass on a larger share of tariffs.’” [Reuters, 2025-07-17]
Citing An Expected One Percent Boost To Inflation From Trump’s Tariffs, FRBNY Chair Williams Called High Interest Rates “Entirely Apropriate.” According to Bloomberg, “Federal Reserve Bank of New York President John Williams said he expects tariffs to have a bigger impact on inflation in the months ahead, making the US central bank’s current restrictive stance ‘entirely appropriate.’ ‘Although we are only seeing relatively modest effects of tariffs in the hard aggregate data so far, I expect those effects to increase in coming months,’ Williams said Wednesday in remarks prepared for an event organized by the New York Association for Business Economics. ‘Maintaining this modestly restrictive stance of monetary policy is entirely appropriate.’ The Fed has so far held its benchmark rate steady this year and is widely expected to continue doing so when officials gather in Washington at the end of July. Investors are betting the next rate cut will come in September, according to futures. Williams said he sees tariffs adding about one percentage point to inflation through the second half of the year and into 2026. A weaker dollar ‘likely will add somewhat to inflationary pressure going forward’ as well, he said. Inflation data earlier this week indicated President Donald Trump’s tariffs on imports have begun to make some goods more expensive. Still, overall consumer prices rose less than expected for a fifth straight month, in part due to more muted increases in services costs. ‘We are seeing initial effects of tariff increases on core goods prices,’ Williams said, pointing to items like household appliances, musical instruments, luggage and tableware.” [Bloomberg, 2025-07-16]
Economic Degradation
Weak Labor Market
[Apollo, 2025-07-18] NOTE: When wage growth for job switchers is higher than overall, that means that people are switching jobs for higher wages, a sign of a strong job market. On the other hand, when, as has been the case since around the time Trump took office, job switches take a pay cut, implying that there is not a lot of competition among employers to hire people.
Funny Budget Math
July 2025: White House OMB Director Vought Defended Failure To Comply With Legislation Mandating Timely Budget Disclosure As Politically Expedient. According to the Washington Post, “White House Office of Management and Budget chief Russell Vought said Thursday that it ‘wasn’t in our interest’ to release a full federal budget proposal, explaining a decision that defied decades of bipartisan tradition and that some experts say broke the law. At a Christian Science Monitor breakfast with reporters, Vought said the administration opted not to release an entire budget plan because it would have been confusing to do so during debate over the Republican tax law, which was approved by Congress earlier this month. Under a 1974 law, the president is required to submit a budget to Congress no later than the first Monday in February, although there is typically a delay for the first year of a president’s term. The GOP’s One Big Beautiful Bill is separate from annual spending legislation, which the budget usually addresses. The White House has said the partial plan it released in effect represents a budget. A White House budget plan traditionally includes projections of economic data that can prove unflattering to the administration or provoke controversy. It details, for example, the White House’s estimates of inflation, deficits, federal debt, gross domestic product and other similar statistics. The Trump administration has yet to release those numbers, though the budget office sent Congress a roughly 1,200-page ‘appendix’ to guide the appropriations process, or negotiations with Congress over the portion of annual federal spending known as discretionary spending ‘We”re certainly going to release a full budget eventually,’ Vought said. But ‘it would confuse the entirety of the country [who] would say, “Well, is it reconciliation, or budget? Which proposal is going in?” It would have been very chaotic and something that wasn’t in our interest to do.’ (Reconciliation is the budget process congressional Republicans used to pass the tax cuts without the prospect of a Democratic filibuster in the Senate.)” [Washington Post, 2025-07-17]
Reduced Investment
[Apollo, 2025-07-19]
Inflation
The Combination Of Trump’s Cuts To Health Care Funding And Higher Costs In Health Care Have Led To ACA Insurers Looking For Double Digit Price Increases. According to the Wall Street Journal, “If you buy your own health insurance, you are probably going to pay more next year—a lot more. Insurers are seeking hefty 2026 rate increases for Affordable Care Act marketplace plans, the coverage known as Obamacare. Blue Cross & Blue Shield of Illinois wants a 27% hike, while its sister Blue Cross plan in Texas is asking for 21%. The largest ACA plans in Washington state, Georgia and Rhode Island are all looking for premiums to surge more than 20%. The companies say the big increases are needed because of higher healthcare costs and changing federal policy, including cuts to subsidies that help consumers pay for plans. The higher premiums would come after years of enrollment growth and mostly single-digit rate increases in the Obamacare market, where individuals and families buy insurance for themselves. About 24 million people have ACA plans. At the request of The Wall Street Journal, the health-research nonprofit KFF analyzed the rate requests for the largest ACA plans by enrollment in 17 states where the insurers’ filings have already become public, as well as the District of Columbia. They showed that some of the biggest national ACA players, including Centene and Elevance Health, are seeking double-digit increases in several states. The Blue Cross & Blue Shield plans of Texas and Illinois are both owned by Health Care Service, a giant nonprofit.” [the Wall Street Journal, 2025-07-18]
Corruption
Crypto
July 2025: Trump’s SEC Chair Floated Exempting Some Crypto Assets From Regulation To Promote Them. According to Bloomberg, “The Securities and Exchange Commission is weighing an innovation exemption from regulations to incentivize tokenization, Chairman Paul Atkins said, after the US House passed a landmark stablecoin bill earlier Thursday. ‘Staff is considering what other changes may be appropriate to incentivize tokenization within our regulatory framework, including an innovation exception that would permit novel ways of trading and more narrowly tailored forms of relief to facilitate the building of other components of a tokenized securities ecosystem,’ he said at a press event. Atkins praised the passage of stablecoin legislation, which is now headed to President Donald Trump, and told reporters the agency is looking forward to ‘establishing clear rules of the road’ for the digital asset space.” [Bloomberg, 2025-07-17]
- Some Financial Institutions Have Promoted Tokenization As A Way To Change Trading Practices In Well-Established Areas Of Securities Regulation. According to Bloomberg, “A potential ‘innovation exception’ from the SEC comes amid an effort by some financial institutions to tokenize popular US stocks, while others seek to create tokenized products of privately-held companies.” [Bloomberg, 2025-07-17]
Through June 2025, Crypto Thefts Were On Track To Top 2024’s Record Amount. 
[Bloomberg, 2025-07-17]